I attach a list of questions related to the FCO's 2006-07 Departmental Report and 2007-08 Main Estimate. To try and reduce the burden on staff drafting answers, I have divided the questions between those that need to be answered in time to feed into the oral evidence session with Sir Peter Ricketts and those that can have a later reply. I would be grateful to receive answers to those questions that are starred by Wednesday 13 June and to the unstarred questions by Friday 29 June.

  As discussed in my meeting with FCO officials, the Committee also wishes to receive:

—    corporate framework documentation which shows the accountability arrangements between FCO Services and the FCO;

—    the OGC's Report on the FCOs efficiency programme;

—    the Q4 efficiency figures for 2006-07 and a reconciliation between these figures and the following statement in the Departmental Report: "projects where there will be increased efficiency savings include further reductions in the UK pay bill (£5 million), further procurement savings in the UK and overseas (£2 million) and savings totaling £2.9 million from local efficiencies" (p 127);

—    a reconciliation between headcount reductions in the efficiency programme and staff numbers in Table 9, page 134. Please note that the Treasury guidance states that "DRs should also contain information on the relationship between staff numbers and the department's workforce reduction taking place under the Efficiency Programme"; and

—    a list of Public Accounts Committee Recommendations (if there are any).

  I would also be grateful if the following link to the Scrutiny Unit's Review of Departmental Reports, which includes examples of best practice across Whitehall, could be passed on to the relevant FCO Officials:

  http://www.parliament.uk/about—commons—house—of—commons—scrutiny—unit/house—of—commons—scrutiny—unit—publications.cfm

Gosia McBride

Second Clerk of the Committee

24 May 2007

FCO QUESTIONS—DEPARTMENTAL REPORT 2006-07

PSA targets

  1.  *Could you provide an account of the main ways in which the PSAs to be announced in the 2007 Comprehensive Spending Review will differ from the PSAs in the 2004 Spending Review?

  2.  *How have you consulted stakeholders in formulating the new PSA targets and business plans?

  3.  *There are currently no PSA targets for the following strategic priorities: reducing the harm to the UK from international crime, including drug trafficking, people smuggling and money laundering; achieving climate security by promoting a faster transition to a sustainable, low-carbon global economy and ensuring the security and good governance of the UK's Overseas Territories (Departmental Report 2006—07, page 15). Will all the strategic priorities be covered by the new PSA targets to be set in the 2007 Comprehensive Spending Review?

  4.  *You informed us last year that the next review of the FCO strategy is due in 2008 and any significant changes could be reflected in the new PSAs (Foreign Affairs Committee Report on FCO Annual Report 2005—06, Ev 6). How are you going to ensure that the new PSA targets agreed in 2007 will reflect any major changes that will be made to the strategy in 2008?

  5.  *The evaluation of progress made against some PSA targets appear to be based on an evaluation of both inputs and outputs or outcomes. For instance the PSA 1 target, which relates to the rolling-back of weapons of mass destruction was assessed as "on course" because although the FCO increased inputs—"the FCO has consolidated progress and continued to expand the depth of counter-proliferation work", outcomes have been poor—North Korea carried out a partially successful nuclear test (p 150). Will the new PSAs more clearly separate out targets that relate to inputs from targets that relate to outputs or outcomes?

  6.  In the Autumn Performance Report, you reported the following against the SR 2002 PSA 4C: "the FCO continues to dedicate resources for the development and implementation of an effective toolkit for conflict and risk analysis, combining quantitative and qualitative analysis". When will this toolkit be completed? Are you intending to use this toolkit to assess performance for the PSA relating to conflict prevention in the years covered by the 2007 Comprehensive Spending Review, or will you continue to use a narrative explanation to measure performance against the target, as you have done for the years, 2006—08?

  7.  What evidence is there that the following indicators are on course?

	Target indicator	Question
SR04 PSA 3(A9)	By end 2007-08: A fully implemented comprehensive peace agreement between the Government of Sudan and the Sudan People's Liberation.	The FCO has rated this indicator in the Autumn Performance Report rather more optimistically than either the MoD or DfID.
	Movement (SPLM), progress towards a stable and democratic government giving an assessment of "amber—on course". In the Autumn Performance Reports, the MoD indicated that it was "red" and DftD indicated that the Darfur region was "red", whereas the remaining region was "amber". What evidence is there to support the change in the FCO's assessment of this indicator from "red" at the time of the 2005-06 Departmental Report to "amber" in the Autumn Performance Report and 2006-07 Departmental Report?
SR04 PSA 4 (H)	Better integration of new EU members in European security, economic, social and JHA systems as a result of UK interventions.	What evidence is that that "new PSA 4 members are playing an increasingly active role across the board", as stated in the 2006-07 Departmental Report, and that this is as a result of UK interventions (p 158).
SR04 PSA 7 (A4)	A strengthened civil society as a consequence of the development of indigenous non-governmental organisations (NGOs), enhanced legislative process, strengthened public administration/civil service.	What evidence is there that FCO funded projects have improved NGO capacity in Saudi Arabia, increased the profile of civil society in Jordan and improved the service offered by police, as stated in the Departmental Report (p 163)?
SR04 PSA 7 (A5)	An increase in the presentation of women in national and local government as well as in civil society and international organisation.	What data is there to suggest that there has been an increase in the presentation of women in national and local government as well as in civil society and international organisations (p 163)?

  8.  SRA 2004 PSA 3 includes the security situation on nine regions/countries, but excludes India/Pakistan and Sri Lanka which were assessed in the similar PSA 2 of SR 2002. Overall, the SRA 2004 indicator is assessed as "amber" (on course), despite a "red" for one area. What would the FCO's assessment have been, had the situation in India/Pakistan and Sri Lanka still have been included in the assessment of the PSA indicator, especially given the recent escalation of conflict in Sri Lanka and present difficulties in Pakistan?

CAPABILITY REVIEW

  9.  The Capability Review classifies the FCO's "ability to plan, resource and prioritise" as an urgent development area and states that "the FCO has not articulated clearly enough either for itself or its partners its distinctive contribution to the Government's objectives" (pp 16, 18). What are you doing to remedy this?

  10.  *The Capability Review finds that "Without a clear business model that consistently applies best practice across the network, the Department will not be well placed to deliver on its objectives and the International Priorities .., the Department does not have a systematic approach for measuring the impact of individual Posts and policies, although some Posts have developed their own methods for doing so. Heads of mission do not have full control of the resources used in Post, which reduces accountability for resources and performance". (pp 22—23)

(i)  What steps are you taking to develop a clear business model that would enable the FCO to apply best practice across the network of different FCO posts?

(ii)  Are you intending to adopt a systematic approach for measuring the impact of different Posts and policies?

(iii)  Are you reviewing whether Heads of Mission should have more control of the resources used in Post to increase the accountability for resources and performance?

  11.  The Capability Review states, "resources are slow to get to some Posts located in countries that are a priority for UK foreign policy" (p 22). What are you doing to address this?

  12.  *The Capability Review states that the change programmes "include a major programme to introduce regional shared service centres which will improve the quality of administrative support at reduced cost" (p 7). The 2006-07 Departmental Report reports that the FCO will work with other government departments such as DfID, "will concentrate on finance, procurement and some HR processes" and "outsource some functions to the private sector" (p 117).

(i)  Is it the FCO's intention for services to be shared between a number of foreign postings in the same region as well as between FCO and DfID?

(ii)  Does the programme to share services with DfID mean you may be likely to share Posts with DfID in the future?

(iii)  What is the time-scale for implementation of shared services?

(iv)  What cost/benefit analysis has been done with regard to the feasibility of shared services and outsourcing of functions?

(v)  Are you intending to outsource functions to the private sector in foreign postings as well as in the UK? Are you considering off-shoring any services which are currently carried out in the UK?

  13.  *The Capability Review reports that a director general for service delivery and business change and a qualified and experienced change director will be appointed (p 7). Have they been appointed yet? If not, when will they be appointed?

  14.  Which of the following opportunities identified for increasing efficiency in the Colhnson Grant Report, Efficiency, effectiveness and the control of costs in the Foreign and Commonwealth Office have you adequately capitalised on and in which areas is significantly more progress still required?

—    Streamlining the Finance structure and processes and integrating the Resource Management Units.

—    Streamlining the Human Resources Directorate's structure and processes.

—    Rationalising managerial layers and spans.

—    Streamlining the Department of Strategy and Information.

—    Applying best or better practice to overseas Posts.

—    Substituting locally engaged people for the UK-based at Post.

—    Improving routine processes.

—    Reducing the number of people in the Corporate Pool 1.4 40.

—    Rationalising the number of people engaged in change projects 0.4 10.

—    Streamlining the management of the internal market 0.4 10.

—    Reducing ancillary costs.

—    Reducing expenditure on consumables.

—    Reducing the cost of overseas accommodation.

—    Reducing the cost of travel and baggage.

FCO SERVICES

  15.  *FCO Services became an Executive Agency on 1 April 2006, with the aim of becoming a trading fund on April 2008 (Departmental Report, p 122).

(i)  What evidence is there that the transition of FCO Services to Executive Agency status has increased efficiency, and also that its becoming a trading fund in April 2008 will increase efficiency still further?

(ii)  What safeguards are in place to ensure that any pressure on FCO Services to increase income levels, as a result of it becoming a trading fund, will not lead to incentives for it to divert resources away from essential or core FCO services to more profitable services?

(iii)  What preparation work does FCO Services have to do in order to become a trading fund on April 2008?

  16.  *What are your expected savings from outsourcing the Foreign and Commonwealth Office's language teaching operation?

  17.  Can you provide the Committee with a copy of your new language teaching business model?

  18.  In the last three years (i) how many FCO staff were trained in a foreign language? (ii) in how many languages was training available and (iii) what proportion of training was carried out overseas?

  19.  In each of the first three years of the new language teaching business model, (i) how many staff do you expect to be trained in a foreign language, (ii) in how many languages will training be available and (iii) what proportion of training will be carried out overseas?

CONFLICT PREVENTION POOLS20.  Please could you provide a breakdown of the budgets in the Conflict Prevention Pools, identifying for each significant budget:

—    which department (FCO, MoD or DFID) has the lead in managing the pool and is responsible for formulating the budget and negotiating the financial provision with the Treasury;

—    the proportion of funding which is normally sought for in the Main Estimates and the supplementaries; and

—    how the different departments coordinate with each other in the delivery of the projects

  21.  What amount of the provision outside RFR 2 in the Main Estimates could be identified as expenditure which is directed at achieving conflict prevention?

  22.  *Please could you give an account of what you perceive to be the benefits to date of the operation of the Conflict Prevention Pools system. Do you expect improvements to be made to the working arrangements of the Conflict Prevention Pool in the period covered by the forthcoming Comprehensive Spending Review?

  23.  *In 2006—07, FCO is estimated to have spent £344 million on conflict prevention (Table 5, p 130), of which £137 million was spent via the Conflict Prevention Pools system (p 46). Are you intending to change the proportion of the FCO conflict prevention budget spent via Conflict Prevention Pools system pool system significantly in the forthcoming Comprehensive Spending Review?

UK TRADE AND INVESTMENT

  24.  The Departmental Report 2007 on UK Trade and Investment states that the "UKTI has identified a priority of 16 high growth markets, based on an assessment of the relative importance of different markets for UK business and the value of committing further resources in these markets. They are Brazil, China, India, indonesia, Malaysia, Mexico, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Thailand, Turkey, United Arab Emirates and Vietnam," (p 17)

(i)  Will the UKTI have a target in the forthcoming Comprehensive Spending Review that measures the success of UK business in selling exports to the 16 high growth markets, it has identified?

(ii)  The Report suggests that the initiative will focus on companies which will have export experience already, but not in these particular "high growth" markets, On what basis has the decision been made to focus on these companies, rather than companies which are already selling to these markets but have the potential to increase their exports still further, or companies which are currently not exporting at all but produce goods which are in demand in these high growth markets?

EFFICIENCY SAVINGS

  25.  *How are you intending to achieve £31.5 million efficiency gains under the pay bill reduction category in 2007-08 (Table 1, p 126)?

  26.  *The ICT efficiency savings in 2006-07 have been reduced from £16.4 million in the 2005-06 Report (Table 5, p 80) to around £1 .1 million in the 2006—07 Report (Table 1, p 126) because of delays in rolling out the Future Firecrest programme (p 127). The Departmental Report (p 127) states that "we now expect to achieve the efficiencies out-side the timeframe of the SR04 programme" and that "we anticipate that the six new projects that we have introduced more than compensate for this shortfall."

(i)  Why has there been slippage in the Future Firecrest programme and when do you expect the Department to realise the efficiencies of this particular programme?

(ii)  Please could you give details of the six new projects that you are expecting to more than compensate for the shortfall in efficiency gains caused by the delay in rolling out the Future Firecrest programme?

  27.  *Could you explain the changes in the following categories within the 2006-07 efficiency savings from their projections as set out in the 2005-06 Departmental Report?

2006-07 Efficiency savings	Departmental Report 2005-06 £million	Departmental Report 2006-07 £million (Up to Q3)
Estates projects	4.2	5.3
Paybill reduction	18.0	8.2
Procurement efficiencies	6.1	8.2

  28.  The Departmental Report states that "service quality has not suffered as a result of the efficiencies" (p 127). What measures are you undertaking to monitor service quality and ensure that it does not fall as a result of projects which are intended to improve efficiency?

  29.  *The Departmental Report 2006—07 states that you have relocated 123 positions and that you have identified a future 171 position for relocation by April 2010. As the target is to relocate 450 posts by 2010-11, you will need to identify a further 156.

(i)  When will you finalise which posts you are going to relocate?

(ii)  What evidence have you got that relocating posts has not had any adverse effect on staff morale?

  30.  The NAO report on efficiencies gives a "green rating" to the measurement of efficiencies in the efficiency savings project in the BBC World Service. However, it gives a "red rating" to the measurement of efficiencies in the project relating to the overseas network of the FCO staff engaged in the UK Trade and Investment work, because there was uncertainty whether efficiency gains were being double counted between the ECO and the UKTI (NAO, The Efficiency Review: A Second Review of Progress, p 50). What measures are you taking to ensure that there is no double counting of efficiency gains between UKTI and the FCO?

CORE TABLES

  31.  *Capital spending in 2006-07 is projected to be £139 million in the 2006-07 Departmental Report (Table 6, p 131), about 8% less than the budget of £150 million set out in the 2005-06 Departmental Report (Table 10, p 85) What are the reasons for the under implementation of the capital budget?

  32.  Administrative income in 2006-07 is estimated to be £128 million in the 2006-07 Departmental Report (Table 8, p 133), 27% higher than was planned in the 2005-06 Departmental Report, where it was set at £101 million (Table 12, p 87). Why has administrative income been so much higher than expected in 2006-07?

  33.  Why have staff numbers for 2005—06 changed from 6,166 in the 2005-06 Departmental Report (Table 13, p 88) to 6,233 in the 2006—07 Departmental Report (Table 9, p 134)?

  34.  The estimated income for visa and other services provided at consular services is set to increase by 10% from £254 million in 2006-07 (DR 2005—06, Table 15 p 91) to £279 million in 2007-08 (DR 2006—07, Table 11, p 137). What proportion of the increase is due to an increase in visa fees and what proportion is due to an increase in the forecast demand for services?

  35.  *What do you estimate to be the cost resulting from the security lapse in the Visa Facilitation Service's website? Can you break this estimate down, including into possible compensation payments and the cost of setting up replacement systems both currently and in the future? When did the FCO become aware of the breach in security?

  36.  In the 2005-06 Departmental Report the following projects were listed as long term capital projects: Mumbai Office with an estimated completion date of 2009 and the Ljubjlana Residence with an estimated completion date of 2008 (Table 16, p 93). Why are they not listed in the 2006-07 Departmental Report (Table 12, p 139)?

  37.  Expenditure on consultants increased by 46% from £24.07 million in 2004-05 (DR 2005-06, Table 25, p 106) to £35.4 million in 2005-06 (DR 2006-07, Table 21, p146). Why has expenditure on IT and estates projects consultants increased so much? What is your budget for expenditure on consultants in 2006-07?

  38.  Corporate sponsorship has fallen from £987,200 (DR 2005—06, Table 26, p 107) in 2005-06 to £21,750 in 2006-07 (DR 2006-07, Table 22, p 147). Do you expect corporate sponsorship to return to its previous 2005-06 levels in 2007-08?

Progress against recommendations in the Financial Management Review

  39.  What progress has been made against the following recommendations in the Financial Management Review?

—    There should be less use of "off line" and instead the global network of PRISM should be fully exploited.

—    Financial skills should be embedded throughout the organisation in line with the rest of Whitehall using the new Professional Skills for Government framework.

—    Resource management units should be accountable to the Finance Director as well as individual Directors general.

ESTIMATES MEMORANDA

  40.  In your written response to questions about the Spring Supplementary Estimates dated 23 April 2007, you stated that 63 visa posts overseas now operate a biometric visa regime.

(i)  What proportion of visitors into the UK now require a biometric visa?

(ii)  Is the FCO aiming for all visitors into the UK to require a biometric visa? If so, when are you aiming for this to take place?

  41.  In your response to our questions on the Winter Supplementary Estimates, you stated that part of the increase in administration budget from 2005-06 to 2006-07 is due to the fact that there was "a planned under-spend against budgets in 2005-06 in order to build up End-Year Flexibility and its subsequent take-up".

(i)  Why did you need to plan an under-spend in the administration budget in 2005-06, in order to build up EYF and ensure its subsequent take-up in 2005-06?

(ii)  You have also stated that you expect to under-spend against the administration budget for 2006-07. What is your expected under-spend?

  42.  In the Main Estimates Memorandum you have stated that you expect to spend £66 million of FCO EYF on estates projects and IT that is more fit for purpose and better value for money. Could you give a more detailed breakdown of the £66 million, showing what proportion you intend to spend on estates projects and what proportion you intend to spend on IT?

24 May 2007